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The CPP: Canada’s Greatest Ponzi Scheme

If you are like many Canadians you might not be fully aware of how The CPP Canadian Pension Plan works or what has been happening with it over the last few years. You might just see it as another deduction off your paycheque.


People have voiced concern over the years that the CPP won’t be around for future generations. Why all the concern and what is Canada going to do about this? These are important questions that will help you plan for your financial future.


First of all what is a Ponzi scheme and what does it have to do with the CPP?



If you type Ponzi Scheme into Wikipedia this is what you will get:


It is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.


To summarize it pays one investor with the money of another investor instead of from the profit.



In 1998 there was the realization that there was a lack of money in the Canada Pension Plan. There wasn’t concern for long as government came up with the easy solution of increasing the contributions of the working population and pay out the retired ones.


You can see the steep increase in contributions (nearly double) in 1998 as well as some major cuts moving in this article:


The Canada Pension Plan: Looking Back at the Recent Reforms – James E. Pesando


And on the Statistics Canada website here.



43% of Canada’s work force is Baby Boomers looking to retire in the next 1-20 years and will all start collecting the CPP benefit. Based on these numbers alone it can be safe to say there will need to be a huge population boom or simply more money taken from younger generations in way of this deduction.


This issue has been combined with the low interest rate environment a volatile stock market, corruption and it has not been pretty for the CPP or likely your RRSP’s. Just take a look at this article from The Star to find out more “$7 Million in Bonuses as CPP Loses $24 Billion“.


retirement planning cpp

The bottom line is the government needs to bring more money from the new guy in order to pay out promises to the old guy – just like a ponzi scheme. The CPP is just one example of this and they will need to increase the suckers contributing.


The question is where are they going to get the money to keep the ponzi scheme alive? Will it be your RRSP, increased paycheque deductions or just creating inflation? Overall it is important to aware and informed of what is to come.




At Safe Pacific we will show you ways to keep your money private and out of the hands of big government and banks. Call or email us for a no obligation consultation.



  1. vancityplanner says:

    Thank you for bringing this topic to light. You read a lot about the USA problem with Social Security but not many talk about how the Canadian system could be short on funds when it’s time for some people to retire in 20 or 30 or 40 years.

    • Hi vancityplanner thanks for your comment.

      We feel very strongly that people should take their financial future and security into their own hands. Our philosophy is for each person to make sure they have their own plan in place and are taken care of. If the CPP is there when our clients are ready to retire, great. If it’s not, at least you have planned and are not devastated or don’t have to work forever just to pay the bills.

      If this is something you would like to talk about please get in contact with us via the phone or email listed at the bottom of the website.

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